Netflix shares tumble 10% on weak outlook, reduced data disclosure
Netflix's market capitalization fell by roughly $35 billion after the streaming giant cut back on viewership reporting and posted a quarterly forecast below Wall Street expectations, raising fresh doubts about its growth trajectory.
Netflix shares plunged more than 10% in early trading, pushing the stock near a two-year low. The decline threatens to erase about $35 billion from the company's roughly $313 billion market valuation.
The selloff was triggered by a disappointing financial forecast paired with a decision to reduce transparency. Starting in 2027, Netflix will report viewing hours only once a year instead of twice, following last year's move to stop disclosing subscriber counts. "Whenever you take away a data point from investors when results aren't as good as they have been you will get punished by the market," said Ben Barringer, head of technology research at Quilter Cheviot.
"Pulling back engagement reporting at the exact moment engagement is in the spotlight gives off a strong 'nothing to see here' vibe," noted Forrester research director Mike Proulx. The reduced disclosure arrives as Netflix faces intensifying competition from both traditional media companies and YouTube.
Investors are increasingly questioning the company's next phase of expansion. The failed attempt to acquire Warner Bros earlier this year has dampened confidence, while the adoption of its ad-supported tier has been slower than anticipated despite management touting it as a major growth driver.
A weaker content slate this year is also weighing on sentiment, contrasting sharply with a strong 2025 lineup that featured the final season of "Stranger Things" and "Squid Game". At least 18 analysts reduced their price targets following a quarterly revenue and earnings forecast that fell short of consensus estimates.
The stock has now dropped 44% since its all-time high in June 2025, with more than a fifth of that decline occurring this year alone. Keeping subscribers engaged is critical for a company that has long traded at a premium to rivals grappling with ongoing cable TV declines. Still, the median analyst price target remains about 40% above Thursday's close, indicating that Wall Street still sees significant upside.
